CYIL vol. 15 (2024)

CYIL 15 ȍ2024Ȏ VIS MAJOR AND HARDSHIP IN INTERNATIONAL TRADE: A STUDY OF THE CISG … 2. The CISG approach to vis major and hardship situations Given its goal to become a universal law for international trade, 10 the CISG could be an advantageous (and neutral) starting point for understanding the regulation of vis major and hardship. However, the CISG does not define or directly refer to vis major or hardship and it intentionally avoids the use of any terminology present in national laws. 11 Instead, Article 79 CISG 12 offers an excuse from liability if the failure to perform was “ due to an impediment ” that the affected party could not control or be reasonably be expected to have taken into account, avoid, or overcome its consequences. Regarding the offered remedies, Article 79 CISG provides an excuse from liability for non-performance without mentioning any alternatives such as renegotiation or revision of the contract. Thanks to this structure, many commentators conclude that Article 79 CISG covers vis major situations, 13 and occurrences such as natural disasters, war, riots, or blockades are often listed as examples of impediments under the CISG. 14 The case law characterized Article 79 CISG as “ a provision with a force majeure character ” 15 and the threshold for impediment as “ akin to impossibility ”. 16 T he bigger question is nonetheless how the CISG understands this impossibility: whether it is a strict technical concept or whether there is a room to consider factual economic struggles of hardship situations as well, arguing that extreme onerousness also makes the contractual performance effectively impossible for the aggrieved party. In other words, does Article 79 CISG cover also negative market developments amounting to hardship? As the CISG is often interpreted as a reflection of lex mercatoria , 17 the discourse was naturally disinclined to consider economic factors under Article 79 CISG, because those are considered to be inherently foreseeable to the merchants. 18 Several commentators 19 as 10 CHIANALE, A., ‘The CISG as a Model Law: A Comparative Law Approach’ (1 March 2016), Singapore Journal of Legal Studies , p. 30, Mar 2016, Available at SSRN: https://ssrn.com/abstract=2762087. 11 LAZEROW, H.I., Uniform Interpretation of CISG (2019), International Lawyer, vol. 52, no. 3, San Diego Legal Studies Pape. P. 375, Available at SSRN: https://ssrn.com/abstract=3889769. 12 Paragraph 1 of Article 79 CISG reads: “ A party is not liable for a failure to perform any of his obligations if he proves that the failure was due to an impediment beyond his control and that he could not reasonably be expected to have taken the impediment into account at the time of the conclusion of the contract or to have avoided or overcome it or its consequences .”. 13 SCHWENZER, I. and SCHROETER, U. (2022) Commentary on the UN Convention on the International Sale of Goods (CISG) . Oxford, United Kingdom: Oxford University Press. pp. 1136–1137. 14 BIANCA, M.J. and BONELL, M.C. (1987) Commentary on the international sales law: The 1980 Vienna Sales Convention . Milan: Giuffre. p. 583. 15 CLOUT Case 1405, decision of International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry dated 23.1.2012. 16 United Nations Commission on International Trade Law. (2016), UNCITRAL 2016 Digest of Case Law on the United Nation Convention on Contracts for the International Sale of Goods. New York: United Nations. Available at: https://uncitral.un.org/sites/uncitral.un.org/files/media-documents/uncitral/en/cisg_digest_2016. pdf p. 374. 17 HOEKSTRA, J. (2020) Regulating International Contracts in a Pandemic: Application of the Lex Mercatoria and Transnational Commercial Law , In: Covid-19, Law and Human Rights: Essex Dialogues. A Project of the School of Law and Human Rights Centre. University of Essex, p. 120. 18 FIROOZMAND, M.R. and ZAMANI, J. (2017) ‘Force majeure in international contracts: Current trends and how International Arbitration Practice is responding’, Arbitration International , 33(3), p. 409, doi:10.1093/ arbint/aix021. 19 SCHLECHTRIEM, P. and THOMAS, G. (1998) Commentary on the UN Convention on the International Sale of Goods . 2nd edn. Oxford: Clarendon Press., Article 79, para 39, MACQUEEN, H.L. (2012) ‘Change

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